The National Medicare Congress

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The National Medicare Congress October 16, 2006
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• Welcome to Medicare Visit
• Colorectal cancer screening
• Screening mammogram
• Pap test/pelvic exam/clinical breast exam
• Prostate cancer screening
• Smoking Tobacco Use Cessation Counseling

• Bone mass measurement
• Glaucoma testing
• Flu shots
• Hepatitis B shots
• Pneumococcal shots
• Cardiovascular screening
• Diabetes screening

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• Medicare covers a one-time Welcome to
  Medicare
• exam (IPPE) within the first 6-months of
  enrolling in
• Medicare.
• Exam includes a thorough review of the persons
• health education and counseling on preventive
• services, like cancer screenings and
  referrals for
• other needed care.
• Visit is subject to the usual Medicare Part B
• deductible and 20 coinsurance.
• Legislative efforts include extending the
  6-month
• timeframe.

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• Breast Cancer Screening
• -- Medicare covers mammogram screenings for
  all
• women age 40 and older every 12 months one
• baseline mammogram between ages 35 and 39
• and a clinical breast exam once every 24
  months.
• -- Copayment/coinsurance, but no deductible
• Cervical Cancer Screening
• -- Medicare covers a pap smear and pelvic
  exam
• once every 24 months or every 12 months
  if the
• woman is at high risk for cervical or
  vaginal
• cancer, or is of childbearing age and had
  an
• abnormal pap smear in the past 36 months.
• -- Copayment/coinsurance for pap test
  collection
• pelvic exam (no cost-sharing for pap lab
  test), but
• no deductible

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• Colon Rectal Cancer Screening
• -- Medicare covers for people aged 50 and
  older at average
• risk of colon cancer, an FOBT every 12
  months, a flexible
• sigmoidoscopy once every 4 years, a
  screening colonscopy
• once every 10 years, or a barium enema
  once every 4 years.
• -- For those at high risk, Medicare pays for
  a screening
• colonoscopy once every 2 years (no minimum
  age required)
• and a barium enema once every 2 years.
• -- No copayment/coinsurance or deductible for
  FOBT for all
• other tests, copayment/coinsurance
  deductible apply
• -- Excepted from the deductible beginning in
  2007.
• Prostate Cancer Screening
• -- Medicare covers a DRE (digital rectal
  exam) and a
• prostate-specific antigen (PSA) blood test
  every 12 months
• for men over 50, and more often if a
  doctor says they are
• needed for diagnostic services.

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• Part D plans are required to cover all or
  substantially all
• cancer drugs
• But only required to cover 1 or 2 drugs in each
  class/category,
• so specific cancer drug may not be covered
• Majority of cancer drugs continue to be covered
  under
• Medicare Part B
• -- Rule of thumb if a drug was covered under
  Part B, it
• continues to be covered under Part B (i.e.,
  if the
• administration of a drug requires that it
  be infused by a
• doctor in a doctors office or outpatient
  hospital setting, it will
• be covered under Part B)

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Purpose

• Analyze Medicare beneficiary cost-sharing for
  seven illustrative cancer treatment protocols,
  including patients with co-morbidities
• Explore sources and extent of Part D cost-sharing
  variation by
• Part D plan (formularies, benefit designs)
• Geographic location
• Low-income subsidy eligibility
• Assess Part B cost-sharing and impact of
  supplemental coverage

Avalere Health LLC
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Seven Treatment Protocols Analyzed
Indicates drugs taken for non-cancer related
conditions. Ativan is a benzodiazepine Senokot
and Colace are over-the-counter products. These
two categories of drugs are both statutorily
excluded from the Part D program.
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Details on Out-of-Pocket Spending Calculations

• Part B
• Includes premium and cost-sharing for physician
  administration services
• Part D
• Assumes treatment protocols begin January 1, 2006
• Assumes drugs for co-morbidities are taken for a
  full year
• Assumes beneficiaries do not receive outside
  cost-sharing assistance
• Assumes beneficiary pays retail price for
  non-covered drugs

Avalere Health LLC
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Total Beneficiary Out-of-Pocket Cost
Source Avalere Health analysis using
DataFrameTM, Avaleres proprietary database of
Medicare Part D plan features. Data from April
2006. Part B analysis based on Centers for
Medicare Medicaid Services (CMS) July 2006
Average Sales Price (ASP) Pricing File (updated
6/26/06) and February 24, 2006 Correction to 2006
Medicare Physician Fee Schedule Payment for Drug
Administration Current Procedural Technology
(CPT) codes.
Includes Part B premium and physician
administration fees. Assumes no supplemental
Part B coverage. Low and high shown across all
plans included in this analysis. Calculation
reflects substitution of AB-rated generic drugs
in Part D when available. Calculation includes
premiums, drugs excluded from Part D (Ativan,
Senokot, and Colace) and spending on any
off-formulary drugs.
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Key Findings

• Part D Drugs For These Cases Are Covered Almost
  Universally
• Copays Can Be More Expensive Than Coinsurance
• Coverage Gap Affects 3 Protocols
• 1 Breast Cancer, with hyperlipidemia, type 2
  diabetes, hypertension
• 6 Metastatic Breast Cancer, with
  hyperlipidemia, hypertension, depression
• 7 Non-Small Cell Lung Cancer
• Coverage in the Gap Benefits, and a Few Caveats
• High Premium Plans May Not Provide Better Value
• Part D Premiums Add Some Regional Variation in
  Cost-Sharing
• Low Income Subsidy Confers Significant Benefit
• Part B and Supplemental Insurance Remain Crucial

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CMS Substantially All Coverage Policy for
Cancer Drugs Is Critical

• All cancer drugs in these protocols are covered
  by 100 of plans
• Overall coverage rate for these case studies is
  98
• Assumes AB-rated generics substituted for
  Vasotec, MS Contin, Percocet and Zocor
• Proventil HFA is off formulary for three plans
• Overall coverage rate is 87 without generic
  substitution

Avalere Health LLC
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Copays for Lower Cost Drugs Can Drive Up
Beneficiary Costs

• Highlights
• Coinsurance for less expensive drugs keeps
  beneficiary cost-sharing low
• Some plans copays exceed the full cost of the
  drug (beneficiary pays full price)
• Copays are generally preferable for high cost
  drugs

Protocol 2 Metastatic Colon Cancer (Proventil
HFA)
Source Avalere Health analysis using
DataFrameTM, Avaleres proprietary database of
Medicare Part D plan features. Data from April
2006. Annual cost for Part D drugs, excluding
premiums
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Patients Hit the Coverage Gap in Three Protocols

• Highlights
• Within these 3 protocols, little difference
  between plans on when patients reach the gap
• 10 reach catastrophic coverage
• Other patients may incur significant costs that
  do not count toward Part D

Source Avalere Health analysis using
DataFrameTM, Avaleres proprietary database of
Medicare Part D plan features. Data from April
2006. Assumes treatment begins on January 1,
2006 One plan omitted from Tarceva analysis due
to conflicting information about formulary
coverage.
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Coverage in the Gap Can Significantly Lower
Beneficiary Cost
Part D Out-of-Pocket Spending for Coverage Gap
Protocols
AARP United Medicare Rx No Gap Coverage Humana
Standard No Gap Coverage PacifiCare
Comprehensive Generics-only Gap Coverage Humana
Complete Full Gap Coverage
Source Avalere Health analysis using
DataFrameTM, Avaleres proprietary database of
Medicare Part D plan features. Data from April
2006. Excludes Part D premium and costs for
drugs excluded from the Part D program
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Some Caveats About Coverage in the Gap

• Other benefit design factors can outweigh the
  benefit of coverage in the gap
• Higher copays in the initial coverage period
• Higher premiums
• Generics-only coverage may still leave
  beneficiaries taking newer drugs exposed to high
  costs
• However, gap coverage may help beneficiaries by
  smoothing out spending from month to month

Avalere Health LLC
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Part D Low-Income Subsidy Confers Significant
Benefit
Part D Cost-Sharing for LIS and Non-LIS Eligibles
in Humana Standard Plan

• Highlights
• LIS-eligibles pay no premium, no deductible, and
  low copays for on-formulary drugs, and have no
  coverage gap
• Cut-off for LIS eligibility is 150 FPL

Source Avalere Health analysis using
DataFrameTM, Avaleres proprietary database of
Medicare Part D plan features. Data from April
2006. Excluding Part D premiums and, in Protocol
6, OTC products Senokot and Colace. Dual-eligibl
e beneficiaries with incomes 100 FPL and
non-duals with incomes below 135 who meet the
asset test
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Supplemental Coverage Is Crucial in Part B

• Approximately 90 of Medicare beneficiaries have
  supplemental Part B coverage
• Medicaid and Medigap pay 100 of Part B
  cost-sharing
• Medicaid supplemental coverage costs nothing
• Medigap carries a premium

Average Premium per Year for Medigap Plan F in
2006

• Highlights
• Cost of Medigap is less than Part B cost-sharing
• Medicare Advantage may provide overall savings

Source Avalere analysis of Centers for Medicare
and Medicaid Services Medicare Personal Plan
Finder at www.medicare.gov.
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Key Takeaways From the Case Studies

• People with cancer can be exposed to wide
  variation in cost-sharing depending on which Part
  D plan they choose
• In some cases, conventional wisdom about gap
  coverage and higher premium plans may be faulty
• Not all cancer patients will fall into the
  coverage gap
• Part B coverage policies and supplemental
  coverage sources are important for people with
  cancer
• Use of AB-rated generics reduces out-of-pocket
  spending considerably
• CMSs substantially all coverage requirement
  for cancer drugs is important

Avalere Health LLC
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• For beneficiaries
• Coverage is good
• Need to look carefully at plans consider your
  treatment
• drugs look at out-of-pocket costs and tiers
  in formulary

• Future
• Monitor Part D only drugs with no generic
  substitute
• Assess subsidy needs above 150 percent poverty
  line